GE, partner to expand natural gas 'highway'

Richard Lee

Published 10:03 pm, Tuesday, November 13, 2012

The idea of installing liquefied natural gas pumps at truck stops across the nation to fuel those big tractor-trailer rigs that rumble along interstate highways will soon become a reality through a partnership between General Electric Co. and Houston-based Clean Energy Fuels.

Clean Energy is buying two "ecomagination" MicroLNG plants from GE Oil & Gas. The modular units, designed to rapidly liquefy natural gas while minimizing a site's physical footprint, will support the fueling stations. GE Energy Financial Services will provide as much as $200 million in financing for the plants.

Seventy LNG pump stations will be added at truck stops by the end of 2012, with 150 to follow, said Sean Gannon, GE Oil & Gas spokesman, adding that Clean Energy already has built two gas liquefication facilities near natural gas lines.

Subsquent gas liquefication plants, using GE technology, will have capacity to supply liquefied gas to several truck stops within about 200 miles.

"GE's modular design can be scaled up very easily for more productivity in a cost-effective manner," Gannon said. The first two GE MicroLNG plants will produce up to 250,000 gallons a day, but production can be ramped up to 1 million gallons daily.

The plan takes advantage of the large amount of natural gas being pumped from shale deposits across much of the country, and truck manufacturers are responding, Gannon said.

In 2013, four major manufacturers will introduce the Cummins Westport 12-liter LNG engine, which is the optimum size for long-haul Class 8 trucks.

"Long-haul trucks are such big consumers of fuel. This can make a real dent in how the country uses its energy," Gannon said.

Clean Energy's fueling network will enable trucks to reduce emissions and lower fuel costs by at least 25 percent, according to Andrew J. Littlefair, president and chief executive officer.

The partnership is a step toward energy independence, Jeff Immelt, GE chairman and chief executive officer, said in a statement.

"With an abundance of cleaner, more affordable natural gas here in the U.S., this is an important opportunity for GE to join Clean Energy in changing the way America drives," Immelt said. "It's also a critical step in developing a natural gas-for-transportation fuel model that can be easily exported to other countries interested in exactly these kinds of breakthrough projects."

The program follows a collaboration announced in March between GE and Chesapeake Energy Corp. to bring to market a compressed natural gas and liquefied natural gas transportation and home-fueling strategy.

"As the long-haul trucking industry begins its transition to natural gas, it will be critical to have a reliable supply of LNG," Littlefair said in prepared comments. The GE-Clean Energy partnership makes sense as natural gas producers reduce production because of low prices -- even as Americans clamor for energy independence, said Tom Biracree, senior financial editor at IHS Herold in Norwalk.

"Rather than importing oil, natural gas is clean, cheap and abundant. This is another example of finding a market for our abundance of natural gas," he said.

U.S. truck manufacturers and the trucking industry will see that it makes sense to build and operate LNG-fueled trucks as LNG stations proliferate, said Hany Shawky, Ph.D., professor of finance and economics at the State University of New York in Albany.

"This has great promise. The trucking industry is going to have to bend to this because gasoline and diesel prices and emissions are making trucking a difficult industry. It's not going to happen overnight," he said, adding that GE's involvement is crucial because of its reputation in finance and energy. "If any company has clout with the U.S. government, it's GE."